Vermont Gas Privately Acknowledges Pipeline Won’t Be Finished This Year

Aug 26, 2016

Vermont Gas Systems has publicly maintained that the company plans to bring its pipeline to Addison County online by the end of this year, but a June presentation to the company’s board said otherwise: The presentation shows that by one internal estimate, the pipeline won’t be in service until April of 2017.

Vermont Gas spokeswoman Beth Parent said the document was a “conservative financial budget that we prepared for our board of directors that reflected the consequences of a delay.”

The document makes no mention of delay, and the presentation slide that mentions an April 2017 completion date is simply titled “ANGP [Addison Natural Gas Project] Project Timeline.”

The completion of the pipeline hinges on a single land parcel, less than a half-mile long, which Vermont Gas doesn’t yet have permission to use. The company is waiting on a ruling from the Vermont Public Service Board in an eminent domain case over use of the land.

The parcel in question is Geprags Park in Hinesburg, and a citizens group claims that Vermont Supreme Court precedent prohibits the state from re-purposing public lands -- such as a park -- to other public uses through eminent domain.

Parent said the company still plans to complete the pipeline this year

“We are on target to finish the project this year,” she said. “That was a conservative estimate if we can’t get access to Hinesburg.”

The budget document presented to the company’s board makes no mention of Hinesburg, or of any delay.

A timeline presented to Vermont Gas' board of directors in June shows that company officials projected that the Addison County pipeline project won't be finished until April 2017. The company has publicly maintained that it plans to finish the pipeline in 2016.

If Vermont Gas can’t finish the pipeline in 2016, it could have major implications for the cost of the project, and the amount Vermont Gas customers have to pay for the pipeline in rates over the coming year.

Vermont Gas Vice President Eileen Simollardes said at an August 4 hearing that the cost of the pipeline would rise above the current estimate of $165.6 million.

Cost increases pose problems for the company because a deal between the state and Vermont Gas means the company isn’t allowed to collect more than $134 million for the project from customers (with some exceptions). That means further cost increases will come out of company profits.

Customers will pay less in rates next year if the pipeline isn’t completed before next spring. Because of the way Vermont Gas’ rates are set, customers pay based on the value of the infrastructure serving them in a given year. If the pipeline is only serving customers for half of the “rate-year” – the year during which rates are in effect – then customers will reimburse the company’s investment at half the rate they would if the pipeline goes into service this fall.

"With timely access to that last parcel, we're focused on completing the project this year." - Beth Parent, Vermont Gas

Vermont Gas has asked regulators to allow the company to charge customers in rates as if the pipeline will be complete this fall. But the state’s Department of Public Service, which is tasked with looking after ratepayers in utility proceedings, challenged that. The department’s proposed rates assume the pipeline will be completed in May of 2017.

At the center of the debate is Geprags Park. Parent says acquiring building rights through Geprags Park is the deciding factor in when the pipeline is completed.

“With timely access to that last parcel, we’re focused on completing the project this year,” she said.

The Public Service Board, which is also reviewing the eminent domain case for the park, will ultimately set the company’s rates based on input from both sides, along with other stakeholder groups.